European EV dominance threatened by China
- Written by : Ashton G. Curran
- Date Published : 2023-04-03
- Date Updated : 2023-04-03
- Category / Tag : articles
This cost advantage is putting pressure on traditional European automakers in their home market.
The CEO of Forvia, Patrick Koller, has lauded Chinese automakers for producing "good vehicles" and predicts that Europe will not be able to stop the importation of Chinese EVs, especially as European consumers increasingly seek out lower-cost electric vehicles.
According to a study by Jato Dynamics, while the average price of electric cars in Europe and the US has risen from 2015 levels, in China it has fallen to €31,829 from €66,819.
Chinese electric car manufacturers have a comparative advantage in producing lower-cost vehicles because of their lower research and development costs, lower levels of capital expenditure, and lower labor costs than their European competitors.
Contrary to perceptions that Chinese products are of lower quality, Europe is "open" to vehicles imported from China by both Chinese manufacturers and global brands in the burgeoning electric car industry, such as Tesla.
Meanwhile, high US tariffs on Chinese-made vehicles have so far kept China's share of the domestic market low.
French consultancy Inovev predicts a sharp rise in Chinese electric vehicle sales in Europe in the coming years as Chinese brands continue to build more lower-cost models.